How to Get Rich

Hey, this is Nivi. You're listening to the Navall Podcast. This is one giant mega sowed that collects every episode we've done on getting rich. All of it is based on his tweet storm of how to get rich without getting lucky. I've collected them all here because we're going to switch topics to the new topic of happiness in the next episode. We've published one of these giant mega sows before, but this one's even bigger. It's about three and a half hours long. It covers all the tweets from the "How to Get Rich" tweet storm, plus all the Q&A that we did after that, plus ten minutes of bonus material at the very end that we've never released. The overall sound quality of this mega sowed improves a lot after the first hour. You can find a link to a clean transcript in the show notes, or if you go to the website nav.al, there's no .com at the end. I hope you enjoy.

You probably know Navall from his Twitter account, and we're going to be talking about his epic tweet storm on how to get rich without getting lucky. We're going to go through most of the tweets in detail, giving Navall a chance to expand on them and just generally riff on the topic. He'll probably throw in some ideas that he hasn't even published before. He's also the co-founder of AngelList and a prolific tech investor in companies like Twitter, Uber, and many more. And I'm the co-founder, evangelist Navall, and I also co-authored the Venture Hacks blog with him back in the day.

Yeah, I mean, the "How to Get Rich" tweet storm definitely hit a nerve. A lot of people say it was helpful, reached across aisles and people outside the tech industry, people in all walks of life. People do want to know how to solve their money problems. Everyone vaguely knows that they want to be wealthy, but they don't have a good set of principles to do it by.

What's the difference between wealth, money, and status?

Wealth is the thing that you really want. Wealth is assets that earn while you sleep. Wealth is the factory with the robots cranking out things. Wealth is the computer program that's running at night that's serving other customers. Wealth is even money in the bank that is being reinvested into other assets and into other businesses. Even a house can be a form of wealth because you can rent it out, although it's probably a lower use of productivity, but land and actually doing some commercial enterprise.

So my definition of wealth is much more businesses and assets that can earn while you sleep. But really, the reason you want wealth is because it buys you freedom. So you don't have to wear a "tire" like a collar around your neck. So you don't have to wake up at 7 AM and rush to work and sit and commute, in traffic. So you don't have to waste away your entire life grinding all the productive hours into a soulless job that doesn't fulfill you.

So the purpose of wealth is freedom. It's nothing more than that. It's not to buy fur coats, or drive Ferraris, or sail yachts, or jet around the world in your Gulfstream. That stuff gets really boring and really stupid really fast. It's really just so that you are your own sovereign individual. You're not gonna get that unless you really want it. The entire world wants it, and the entire world is working hard at it.

To some extent, it is competitive. It's a positive-sum game, but there are competitive elements to it because there's a finite amount of resources right now in society, and to get the resources to do what you want, you have to stand out.

Money is how we transfer wealth. Money is social credits. It is the ability to have credits and debits on other people's time. If I do my job right, if I create value for society, society says, "Oh, thank you. We owe you something in the future for the work that you did in the past. Here's a little IOU, let's call that money." And that money gets debased because people steal the IOUs, the government prints extra IOUs, people counterfeit IOUs.

But really what money is trying to be is trying to be a reliable IOU from society that you are owed something for something you or someone who gave you that money did in the past. We can transfer these IOUs around, so really, money is how we transfer wealth.

There are fundamentally two huge games in life that people play. One is the money game because money's not gonna solve all your problems, but it's gonna solve all your money problems. So I think that people know that, they realize that. So they want to make money, but at the same time, many of them deep down believe that they can't make it.

They don't want any wealth creation to happen, so this virtue signals by attacking the whole enterprise by saying, "Well, making money is evil," blah. But what they're trying to do is they're actually playing the other game, the status game. They're trying to be high status in the eyes of other people watching by saying, "Oh, I don't need money. We don't want money."

Status is just your ranking in the social hierarchy. Wealth is not a zero-sum game. Everybody in the world can have a house because you have a house doesn't take away from my ability to have a house. If anything, the more houses that are built, the easier it becomes to build houses. The more we know about building houses, the more people can have houses. So wealth is a very positive-sum game.

We create things together. We're starting this endeavor to create this hopefully piece of art that explains what we're doing. At the end of it, something brand-new will be created, it's a positive-sum game.

Status, on the other hand, is a zero-sum game. It's a very old game we've been playing since monkey tribes, and it's hierarchical—who's number one, who's number two, who's number three—and for a number three to move to number two, number two has to move out of that slot. So status is a zero-sum game. Politics is an example of a status game. Even sports is an example of a status game. To be the winner, there must be a loser.

I don't fundamentally love status games. They play an important role in our society, so we figure out who's in charge. Fundamentally, you play them because they're a necessary evil.

The problem is on an evolutionary basis. Like, if you go back thousands of years, status is a much better predictor of survival than wealth as you couldn't have wealth before the farming age. Before farming, you couldn't store things. Hunter-gatherers carried everything on their backs, so hunter-gatherers lived entirely in status-based societies. Farmers started going to wealth-based societies, and the modern industrial economies are much more heavily wealth-based societies.

But there's always a subtle competition going on between status and wealth. For example, when journalists attack rich people or they attack the technology industry, they're really bidding for status. They're saying, "No, the people are more important, and I, the journalist, represent the people, and therefore I am more important."

The problem is that by playing these status games, to win at a status game, you have to put somebody else down. That's why you should avoid status games in your life because they make you into an angry, combative person. You're always fighting to put other people down to put yourself and the people that you like up. They're always going to exist. No way around it, but just realize that most of the times when you're trying to create wealth, you're actually getting attacked by someone else, and they're trying to look like a goody two-shoes, but really what they're doing is they're trying to up their own status at your expense. They're just playing a different game, and it's a worse game. It's a zero-sum game instead of a positive-sum game.

One thing you mentioned before the interview that stuck with me was the idea that you think everyone can become rich and that perhaps some of the ways of getting rich or the idea of wealth is vilified by some people in other countries. Say you want to expand on that a little bit.

Yeah, I think there's this notion that making money is evil, right? It's rooted all the way back down to "Money's the root of all evil." People think that bankers steal our money. And you know, it's somewhat true in that in a lot of the world, there's a lot of theft going on all the time. The history of the world, in some sense, is this predator-prey relationship between makers and takers. There are people who go out and create things and build things and work hard on things, and then there are people who come along and play with a sword or a gun or taxes or crony capitalism or communism or what-have-you. There's all these different methods to steal; even in nature, there are more parasites than there are non-parasitical organisms. You have tons of parasites in you who are living off of you, and the better ones are symbiotic—they're giving something back—but there are a lot that are just taking.

That's just the nature of how any complex system is built. But what I am focused on is true wealth creation. It's not about taking money; it's about creating abundance. Obviously, there's not a finite number of jobs or a finite amount of wealth, otherwise we would still be sitting around in caves figuring out how to divide pieces of firewood and, you know, the occasional dead deer.

So most of the wealth in civilization—in fact, not most; all of it—has been created, and it got created from somewhere. It got created from people; it got created from technology. Critical productivity got created from hard work. So this idea that wealth is stolen is, I think, this horrible zero-sum game that people who are trying to gain status play. But the reality is, everyone can be rich. And we can see that by seeing that in the first world, everyone is richer than almost anyone who was alive 200 years ago. Nobody had any biotics; nobody had cars; nobody had electricity; nobody had the iPhone.

So all of these things are inventions that have made us wealthier as a species today. I would rather be a poor person in a first-world country than be a rich person in Louis XIV France. I'd rather be a poor person today than an aristocrat back then, and that's just because of wealth creation—the engine of technologies, science that is applied for the purpose of creating abundance.

So I think fundamentally everybody can be wealthy, and the thought experiment I want you to think through is: Imagine if everybody had the knowledge of a good software engineer and a good hardware engineer. If you could go out there and you could build robots and computers and bridges and program them—let's say every human knew how to do that. What do you think society would look like in 20 years?

My guess is what would happen is we would build robots, machines, software, and hardware to do everything, and we would all be living in massive abundance. We would essentially be retired in the sense that none of us would have to work for any of the basics. We'd even have robotic nurses; we have machine-driven hospitals; we'd have self-driving cars; we'd have farms that are 100 percent automated; we'd have clean energy.

So at that point, we could use technology breakthroughs to get everything that we want. And if anyone is still working at that point, they're working as a form of expressing their creativity. They're working because it's in them to contribute and to build and to design things. But I don't think capitalism is evil; capitalism is actually good. It's just that it gets hijacked. It gets hijacked by improper pricing of externalities. It gets hijacked by improper deals where you have corruption, or you have monopolies.

All capitalism is intrinsic to the human species; capitalism is not something we invented. Capitalism is not even something we discovered. It is innate to us in every exchange that we have. When you and I exchange information, I want some information back from you. I give you information; you give me information. If we weren't having a good information exchange, you'd go talk to somebody else.

So the notion of exchange and keeping track of credits and debits, this is built into us as flexible social animals. We are the only animal in the animal kingdom that cooperates across genetic boundaries. Most animals don't cooperate, but when they do, they cooperate only in packs where they co-evolved together and they share blood, so they have some shared interests. Humans don't have that, and what lets us cooperate is because we can keep track of debits and credits.

Who put in how much work, who contributed how much—all free market capitalism is, so I strongly believe that it is innate to the human species, and we are going to create more and more wealth and abundance for everybody. Everyone can be wealthy; everybody can be retired; everybody can be successful. It is merely a question of education and desire. You have to want it; if you don't want it, that's fine; then you opt out of the game.

But don't try and put down the people who are playing the game because that's the game that keeps you in a comfortable warm bed at night; that's the game that keeps a roof over your head; that's a game that keeps your supermarkets stocked; that's the game that keeps the iPhone buzzing in your pocket. So it is a beautiful game that is worth playing ethically, rationally, morally, socially for the human race, and it's gonna continue to make us all richer and richer until we have massive wealth creation for anybody who wants it.

And it's not just individuals secretly despising wealth, right? There are countries, groups, political parties that overtly despise wealth, or at least seem to.

That's right. And so what those countries, political parties, and groups are doing is essentially playing the zero-sum game of status, and in the process, they destroy wealth creation. They drag everybody down to their level, which is why the U.S. is a very popular country for immigrants because it's the American dream—anyone can come here pretty poor, and then work really hard and make money and get wealthy, but even just make some basic money for their lives.

Obviously, the definition of wealth is different for different people. A first-world citizen's definition of wealth might be, "Oh, I have to make millions of dollars, and I'm completely done," whereas a third-world poor immigrant just entering the country—and we were poor immigrants who came here when I was fairly young to the United States—wealth may just be a much lower number. It may just be that I don't have to work a manual labor job for the rest of my life that I don't want to work.

But groups that despise it will essentially bring the entire group down to that level. If you get too many takers and not enough makers, society falls apart. You're in a communist country; look at Venezuela, right? They were so busy taking and dividing and reallocating that people are literally starving in the streets and losing kilograms of body weight every year just due to sheer starvation.

Another way to think about it: imagine an organism that has too many parasites. You actually need some small number of parasites to stay healthy, and you need a lot of symbionts, like all the mitochondria in all of our cells that help us respirate and burn oxygen. These are symbionts that help us survive—we can survive without them—but to me, those are partners in the wealth creation that creates the human body. But if you just were filled with parasites, if you got infected with worms or a virus or bacteria that were purely parasitical, you would die.

Any organism can only withstand a small number of parasites. And when the parasitic element gets too far out of control, you die. So, you know that again, I'm talking about ethical wealth creation, and I'm not promoting capitalism. I'm not gonna talk about mispriced externalities like the environment. I'm talking about free minds and free markets, small steel exchange between humans that's voluntary.

And I think that kind of wealth creation, if a society does not respect it, the group does not respect it, that society will plunge into ruin and darkness.

Obviously, we want to be wealthy, and we want to get there in this lifetime without having to rely on luck. A lot of people think making money is about luck. It's not; it's about becoming the kind of person that makes money. You know, I like to think that if I lost all my money, and if you dropped me on a random street in any English-speaking country, within five to ten years, I'd be wealthy again, right? Because it's just a skill set that I've developed, and I think anyone can develop.

In a thousand parallel universes, you want to be wealthy in 999 of them; you don't want to be wealthy in the handful of them where you got lucky. So we want to factor luck out of it.

There's really four kinds of luck that we were talking about. This came from a book by Pmarca. Marc Andreessen wrote a blog post about it, but there's different kinds of luck. The first kind of luck he might just say is that blind luck, where I just got lucky because something completely out of my control happened. You know, that's fortune; that's fate, etc.

Then there’s luck that comes through persistence and hard work, sorry, motion, which is when you're just running around creating lots of opportunities. You're generating a lot of energy; you're doing a lot of things. Lots of things will just get stirred up in the dust; it's almost like mixing a petri dish and seeing what combines or mixing a bunch of reagents and seeing what combines. You're just generally in a force and hustle and energy that luck will find you.

A third way is that you just become very good at spotting luck. So if you are very skilled in a field, you will notice when a lucky break happens in that field, and other people who aren't attuned to it won't notice. So you become sensitive to luck, and that's the skill, knowledge, and work.

And then the last kind of luck is the weirdest, hardest kind, but that's what we want to talk about, which is where you build a unique character, a unique brand, a unique mindset, where then luck finds you. For example, let's say that you're the best person in the world at deep-sea underwater diving, and you're known to take on deep-sea underwater dives that nobody else will even attempt to dare. And then by sheer luck, somebody finds a sunken treasure ship off the coast they can't get at.

Well, their luck just became your luck because they're gonna come to you to get that treasure, and you're gonna get paid for it. Now, that's an extreme example, but it's just showing how the person who got lucky but finding the treasure chest—that was blind luck; but then coming to you and asking you to extract it and having to give you half, that's not luck—you created your own luck. You put yourself in a position to be able to capitalize on that luck or to attract that luck when nobody else has created that opportunity for themselves.

So when we talked about getting rich without getting lucky, we want to be deterministic. We don't want to leave it to chance.

Do you want to elaborate a little bit more on the idea that in a thousand parallel universes, you want to get rich in 999 of them?

I think some people are going to see that and say, "That sounds impossible." It sounds like it's too good to be true.

No, I don't think it's impossible. I think that you may have to work a little bit harder at it, given your starting circumstances. I mean, remember I started as a poor kid in India, right? So if I can make it, anybody can in that sense. Now, obviously, I had all my limbs, and I had my mental faculties, and I did have an education, so there are some prerequisites you can't get past. But if you're listening to this video or podcast, you probably have the requisite means at your disposal, which is a functioning body and a functioning mind.

And I have encountered plenty of bad luck along the way. The first little fortune that I made, I instantly lost in the stock market. The second little fortune that I made, or I should have made, I got cheated by my business partners. It's only the third time around that has been a charm, and even then, it has been a slow and steady struggle.

And I haven't made money in my life in one giant payout. It's always been a whole bunch of small things piling up. So it's more about consistently creating wealth by creating businesses and quitting opportunities and creating investments. It hasn't been like a giant one-off thing. My personal wealth has not been generated by one big year; it just stacks up little bit by little bit, more options, more businesses, more investments, more things that I can do.

The same way someone like Anish Ghalisaw service is building his brand online; he's building videos. It's not like any one video is going to suddenly shower him with riches overnight. It's going to be a long lifetime of learning, of reading, of creating. This is gonna compound.

So we're talking about getting wealthy so you can retire, so you have your freedom. I'm not retired in a sense that I don't do anything, but in the sense that you don't have to be any place you don't want to be. You don't have to do anything you don't want to do, and you can wake up when you want, you can sleep when you want. You don't have a boss—that's freedom.

So we're talking about enough wealth to get to freedom, and especially thanks to the internet these days, those opportunities are massively abundant. I, in fact, have too many ways to make money; I don't have enough time. I literally have opportunities pouring out of my ears, and the thing I keep running out of is time. There's just so many ways to create wealth, to create products, to create businesses, to create opportunities, and to, as a by-product, get paid by society that I just can't even handle it all.

I think it's pretty interesting that the first three kinds of luck that you described there are very common clichés for them that everybody knows. And then for that last kind of luck that comes to you out of the unique way that you act, there's no real cliché for it.

So for the first three kinds, there is dumb luck or blind luck; that's the first kind of luck. The second kind of luck, there's the cliché that fortune favors the bold. That's a person who gets lucky just by stirring the pot and acting. The third kind of luck, people say that chance favors the prepared mind. But for the fourth kind of luck, there is not really a common cliché out there that matches the unique character of your action, which I think is interesting and perhaps an opportunity.

And it also just shows that people aren't necessarily taking advantage of that kind of luck the way they should be. I think also at that point, it starts becoming so deterministic that it stops being luck. So the definition starts fading from luck to more destiny.

So I would characterize that fourth one as you build your character in a certain way, and then your character becomes your destiny. One of the things I think that is important to making money when you want the kind of reputation that makes people do deals through you—you know, I use the example of like if you're a great diver, then treasure hunters will come and give you a piece of the treasure for your diving skills. If you're a trusted, reliable, high-integrity, long-term-thinker deal-maker, then when other people want to do deals, but they don't know how to do them in a trustworthy manner with strangers, they will literally approach you and give you a cut of the deal or offer you a unique deal just because of the integrity and reputation that you've built up.

Warren Buffett, he gets offered deals, and he gets to buy companies, and he gets to file warrants and bail out banks and do things that other people can't do because of his reputation. But of course, that's fragile. It has accountability on the line; it has a strong brand on the line. And as we will talk about later, that comes with accountability attached.

But I would say your character, your reputation, these are things that you can build that then will let you take out advantages of opportunities that other people may characterize as lucky, but you know that it wasn't luck.

You said that this fourth kind of luck is more or less a destiny. There's a quote from that original book that was in Mark's blog posts from Benjamin Disraeli, who I think was the former Prime Minister of the UK. The quote to describe the kind of luck was: "we make our fortunes, and we call them fate."

There were a couple other interesting things about this kind of luck that were mentioned in the blog post I think it'll be good for the listeners to hear about. Is that this fourth kind of luck can almost come out of eccentric ways that you do your things, and that eccentricity is not necessarily a bad thing in this case—in fact, it's a good thing.

Yeah, absolutely, because the world is a very efficient place. So everyone has dug through all the obvious places to dig, and so to find something that's new and novel and uncovered, it helps to be operating on a frontier, where right there you have to be a little eccentric to be out on the frontier by yourself. Then you just have to be willing to dig deeper than other people, deeper than seems irrational just because you're interested.

The two quotes that I've seen that expressed this kind of luck, in addition to that Benjamin Disraeli one, are this one from Sam Altman, where he said extreme people get extreme results. I think that's pretty nice. And then there's this other one from Jeffrey Pfeffer, who is a professor at Stanford, that you can't be normal and expect abnormal returns.

I've always enjoyed that one too. Yeah, and one quote that I like, which is the exact opposite of that is "Play stupid games, win stupid prizes."

A lot of people spend a lot of their time playing social games, like on Twitter, where you're just trying to improve your social standing, and you basically win stupid social prizes, which are worthless.

I guess the last thing that I have from this blog post is just the idea that by pursuing these kinds of luck, especially the last one, basically everything but dumb luck, by pursuing them, you essentially run out of unlock.

So if you just keep stirring the pot and stirring the pot, that alone, you will run out of unlock, yeah. Or it could just be reversion to the mean, right?

So then you at least neutralize luck, so that it's your own talents that come into play next.

You go into more specific details on how you can actually get rich and how you can't get rich. The first point was about how you're not going to get rich renting out your time. You must own equity, a piece of the business to gain your financial freedom.

This is probably one of the absolute most important points. People seem to think that you can create wealth and make money through work, and it's probably not going to work—the main reason for that is just that your inputs are very closely tied to your outputs in almost any salary job. Even at one that's paying a lot per hour, like a lawyer or a doctor, you're still putting in the hours, and every hour you get paid.

So what that means is, when you're sleeping, you're not earning. When you're retired, you're not earning. When you're on vacation, you're not earning. And you can't earn non-linearly. If you look at even doctors who get rich, like really rich, it's because they open a business—they open a private practice—and then private practice builds a brand that attracts people, or they build some kind of medical device or a procedure or a process where they've intellectual property.

So essentially, you're working for somebody else, and that person is taking on the risk and has the accountability and the intellectual property and the brand, so they're just not gonna pay you enough. They're gonna pay you the bare minimum that they have to get you to do a good job.

And that can be a high bare minimum, but it's still not gonna be true wealth where you're retired. And then finally, you're actually just not even creating that much original for society. Like I said, this tweet storm should have been called "How to Create Wealth." It's just "How to Get Rich" with a more catchy title.

But you're not creating new things for society; you're just doing things over and over, and you're essentially replaceable because you're now doing a set role.

Most set roles can be taught. If they can be taught like in a school, then eventually you'll be competing with someone who's got more recent knowledge, who's been taught and is coming in to replace you. You're much more likely to be doing a job that can be eventually replaced by a robot or by an AI.

And it doesn't have to be a wholesale replacement overnight; it can be replaced a little bit at a time, and that eats into your wealth creation and therefore your earning capability. So fundamentally, your inputs are matched to your outputs; you are replaceable and you're not being creative. I just don't think that that is the way that you can truly make money.

So everybody who really makes money, at some point, owns a piece of a product or a business or some kind of intellectual property. That can be through stock options, so if you work at a tech company, that's a fine way to start, but usually the real wealth is created by starting your own companies or by, you know, even investors there in an investment for them, and they're buying equity.

So these are much more the routes to wealth. It doesn't come to the hours. You really just want a job or a career or profession where your inputs don't matter, your outputs do.

So if you look at modern society, I get into later in the tweet storm, businesses that have high creativity and high leverage tend to be ones where you could do an hour of work and it can have a huge effect, or you could do a thousand hours of work and it can have no effect.

For example, look at software engineering. One great engineer can, for example, create Bitcoin and create billions of dollars worth of value. An engineer who's working on the wrong thing or not quite as good or just not as creative or thoughtful or whatever can work for an entire year with every piece of code they ship and whatnot, getting used. Customers don't want it.

That is an example of a profession where the input and the outputs are highly disconnected. It's not based on the number of hours that you put in. Whereas on the extreme other end, if you're a lumberjack, even the best lumberjack in the world, assuming they're not working with tools, so the inputs and outputs are really connected—they're just using an axe or a saw. The best lumberjack in the world may be like 3x better than one of the worst lumberjacks, right? It's not going to be a gigantic difference.

So you want to look for professions and careers where the inputs and the outputs are highly disconnected. This is another way of saying that you want to look for things that are leveraged. And by leverage, I don't mean financial leverage alone like Wall Street uses, and that has a bad name. I'm just talking about tools. We're using tools. A computer is a tool that software engineers use.

If I'm a lumberjack with bulldozers and automatic robot axes and saws, I'm gonna be using tools and have more leverage than someone who's just using his bare hand and trying to rip the trees out by their roots. Tools and leverage are what create this disconnection between inputs and outputs. Creativity—so the higher the creativity component of a profession, the more likely it is to have disconnected inputs and outputs.

So I think that if you're looking at professions where your input and outputs are highly connected, it's pretty hard to create wealth and make wealth for yourself in that process. Any other big thing you should avoid other than renting out your time?

Yeah, there are two tweets that I put out that are related. So the first one is talking about beer or something like how it—your lifestyle, you know, has to upgrade; it shouldn't get upgraded too fast. And that one said, "People who are living far below their means enjoy your freedom."

That people busy upgrading their lifestyles just can't fathom. And I think that's very important. Like just to not upgrade your lifestyle all the time to maintain your freedom, and it gives you freedom of operation. Once you make a little bit of money, you still want to be living like your old self, so that worry goes away.

So, don't want to upgrade that house lifestyle and all that stuff. Let's say you're gonna get a thousand dollars an hour. The problem is that when you go into a work lifestyle like that, you don't just suddenly go from making twenty dollars an hour to making a thousand dollars an hour.

That's a progression over a long career. And as that happens, one subtle problem is that you upgrade your lifestyle as you make more and more money, and that upgrading of the lifestyle ups what you consider to be wealth—And you stay in this wage slave trap.

So I forget who said it; maybe it was nothing too late, but he said, "You know, the most dangerous things are heroin and a monthly salary," right? Because they are highly addictive. The way you want to get wealthy is you want to be poor and working and working and working.

And this, for example, is how the tech industry works. You don't make any money for ten years, and then suddenly in year 11 you might have a giant payday, which is what, by the way, one reason why these very high marginal tax rates for the so-called wealthy are flawed, because the highest-risk-taking most creative professions literally lose money for a decade of your life while you take massive risk, and you bleed and bleed and bleed.

And then suddenly in year 11 or year 15 you might have one single big payday. But then, of course, Uncle Sam shows up and says, “Hey, you know what? You just made a lot of money this year, therefore you’re rich, therefore you’re evil, and you got to hand it all over to us." So it just destroys those kinds of creative risk-taking professions. But ideally you want to make your money in discrete lumps separated over long periods of time, so that your own lifestyle does not have a chance to adapt quickly.

And then you can say, "Okay, now I'm done. Now I'm retired, now I'm free." I'm still gonna work because you got to do something with your life, but I'm gonna work on only the things that I want, when I want. It’s gonna be much more creative expression and much less about money.

You're not going to get rich renting out your time, but you say that you will get rich by giving society what it wants but does not yet know how to get at scale.

That's right. So essentially, I could—we talked about before—money is IOUs from society saying, “You did something good in the past, now here’s something that we owe you for the future.” And so society will pay you for creating things that it wants but society doesn’t yet know how to create those things, because if it did, it would need you; they wouldn't already be stamped out big time.

Almost everything in your house and your workplace and on the street used to be technology at one point in time. At the time when oil was technology, that made J.D. Rockefeller rich. There was a time when cars were technology that made Henry Ford rich. So technology is just a set of things, as Alan Kay said, that don't quite work yet. Once something works, it's no longer technology.

So society always wants new things, and if you want to be wealthy, you want to figure out which one of those things you can provide for society that it does not yet know how to get but it will want—that's natural to you and within your skill set, within your capabilities. And then you have to figure out how to scale it, because if you just build one of it, that's not enough. You gotta build thousands or hundreds of thousands or millions or billions of them so everybody can have one.

Steve Jobs and his team, of course, figured out that society would want smartphones—computer in their pocket with all the phone capability times a hundred and be easy to use. So they figured out how to build that, and then they figured out how to scale it, and they figured out how to get one into every first-world citizen's pocket, and eventually every third-world citizen, too.

Because of that, they're heavily rewarded. Apple is the most valuable company in the world. The way I tried to put it was that the entrepreneur's job is to try to bring the high-end to the mass market. It starts as high-end first; it starts as an act of creativity first. You create just because you want it; you want it, and you know how to build it, and you need it, and so you build it for yourself.

Then you figure out how to get it to other people, and then for a little while, rich people have it—like, for example, rich people had chauffeurs. Then they had black town cars, and then Uber came along and everyone had their private driver; it was available to everybody. And now you can even see Uber pools that are replacing shuttle buses because it's more convenient.

And then you get scooters, which are even further down market than that. So you're right; it's about distributing what rich people used to have to everybody. But the entrepreneur's job starts even before that, which is creation—entrepreneurship is essentially an act of creating something new from scratch, predicting that society will want it, and then figuring out how to scale it and get it to everybody in a profitable way, in a self-sustaining way.

Let’s look at this next tweet, which I thought was cryptic and also super interesting about the kind of job or career that you might have. You said, “The internet has massively broadened the possible space of careers most people haven't figured this out yet.”

The fundamental property of the internet, more than any other single thing, is that it connects every human to each other human on the planet. You can now reach everyone, whether it's by emailing them personally, broadcasting to them on Twitter, whether it's by posting something on Facebook that they find, or putting up a website they come and access. It connects everyone to everyone, so the internet is an inter-networking tool; it connects everybody. That is its superpower.

So you want to use that. What that helps you figure out is that the internet means that you can find your audience for your product or your talent or skill no matter how far away they are. For example, Maynott, who's an illustrator, if he was in these videos pre-internet, how would he get the message out there? It would just be—what would he do? He would run around where he lives in his neighborhood showing it to people, or he would try to get it played in his local movie theater. It was impossible.

It only works because he can put it on the internet, and then how many people in the world are really interested in it or even interested in what we're talking about? Really gonna absorb it, right? It's gonna be a very small subset of humanity. The key is being able to reach them.

So what the internet does is allows any niche obsession—which could be just the weirdest thing. It could be like people who collect snakes. There are people who like to ride hot-air balloons, the people who like to sail around the world by themselves—just one person on a craft, or someone who's obsessed with miniature cooking, like there's this whole Japanese miniature cooking phenomenon, or there's a show about a woman who goes into people's houses and tidies it up, right?

So whatever niche obsession you have, the internet allows you to scale. Now, that's not to say that what you build will be the next Facebook, reach billions of users, but if you just want to reach 50,000 passionate people like you, there's an audience out there for you. So the beauty of this is that we have 7 billion beings on this planet; the combinatorial of human DNA is incredible. Everyone is completely different—you'll never meet any two people who are even vaguely similar to each other that can substitute for each other.

It's not you can say, “Well, maybe just left my life so I can have this other person come in and he's just like maybe, and I get the same feelings, let's say in responses and the same ideas.” No, there are no substitutes for people; people are completely unique. So given that, each person has different skill sets, different interests, different obsessions, and it's that diversity that becomes a creative superpower.

So each person can be creatively superb at their own unique thing, but before that, it didn't matter because if you were living in a little fishing village in Italy, like your fishing village didn't literally need your completely unique skill, and you had to conform to just a few jobs that were available. But now, today, you can be completely unique. You can go out on the internet, and you can find your audience, and you can build a business and create a product and build wealth, and make people happy just by uniquely expressing yourself.

The space of careers has been so broadened: esports players, people making millions of dollars x Fortnite, people creating videos and uploading them—YouTube broadcasters, bloggers, podcasters. Joe Rogan, I read true or false—I don't know, but I read that he's going to make about a hundred million dollars a year on his podcast and he’s had two billion downloads.

Even PewDiePie is a hilarious tweet that he tweeted the other day: PewDiePie is the number one trusted name in news. This is a kid, I think, in Sweden, and he’s got three times the distribution of the top cable news networks just on his news channel; it’s not even on his entertainment channel.

The internet enables any niche interest. As long as you’re the best at it, you scale out. And the great news is because every human is different, everyone is the best at something— you being themselves.

Another tweet I had that is worth weaving in, but didn't go into this tweet storm was a very simple one. I liked things from making them dumb because they're easy to remember and easy to hug on to, but that one was "Escape competition through authenticity." So when you're competing with people, it's because you're copying them; it's because you're trying to do the same thing.

But every human is different. Don't copy. I know we're magnetic creatures, and René Girard has a whole mimetic theory, but it's much easier than that. Don't imitate, don't copy, just do your own thing. No one can compete with you on being you; it's that simple, and so the more authentic you are to who you are and what you love to do, the less competition you’re gonna have.

So you can escape competition through authenticity. When you realize that no one can compete with you on being you. Normally, that would have been useless advice pre-internet; post-internet, you can turn that into a career.

Talk a little bit about what industries you should think about working in, what kind of job you should have, and who you might want to work with.

You said one should pick an industry where you can play long-term games with long-term people.

Why?

Yeah, this is an insight into what makes Silicon Valley work and what makes high-trust societies work. Essentially, all the benefits in life come from compound interest, whether it’s in relationships, or making money, or in learning.

So, compound interest is a marvelous force where it's like, you know, you start out with 1x what you have, and then if you increase 20 percent a year for 30 years, it's not that you got 30 years x 20 percent added on; it was compounding. So it just grew and grew and grew until you suddenly got a massive amount of whatever it is, whether it's goodwill or love or relationships or money.

So I think compound interest is a very important force. You have to go to play a long-term game, and long-term games are good matches for compound interest. They're also good for trust. If you look at prisoners' dilemma-type games, the solution to prisoner's dilemma is tit for tat, which is "I'm just gonna do to you what you did last time to me," with some forgiveness in case there was a mistake made.

But that only works in an iterated prisoners' dilemma—in other words, if we play the game multiple times. So if you're in a situation, for example, you're in Silicon Valley where people are doing business with each other and they know each other, they trust each other, then they do right by each other because they know this person will be around for the next game.

Now, of course, that doesn’t always work because you can make so much money in one move in Silicon Valley. Sometimes you betray each other because they're just like, "I’m gonna get rich enough off of this that I don’t care." So there can be exceptions to all these circumstances, but essentially, if you want to be successful, you have to work with other people, and you have to figure out who can you trust, and who can you trust over a long, long period of time that you can just keep playing the game with them.

That compound interest and high trust will make it easy to play the game and will let you collect the major rewards, which are usually at the end of the cycle.

So, for example, Warren Buffett has done really well as an investor in the U.S. stock market, but the biggest reason he could do that was because the U.S. stock market has been stable and around and didn't get, for example, seized by the government during a bad administration, or the U.S. didn't plunge into some war, the underlying platform didn't get destroyed. So in his case, he was playing a long-term game, and the trust came from the U.S. stock market stability, in Silicon Valley, the trust comes from the network of people in the small geographic area.

That you've figured out over time who you can work with, who you can't. If you keep switching locations, and you keep switching groups—let’s say you started out in the woodworking industry and you build up a network there, and you’re working hard, you’re trying to build a product in woodworking industry, and then suddenly another industry comes along that’s adjacent but different, but you don’t really know anybody in it and you want to dive in and make money there, if you keep hopping from industry to industry, you’re gonna actually be starting from scratch.

You’re not gonna know who to trust; they’re not gonna trust you. They’re also industries in which people are transient by definition— politics is an example of that. Right? In politics, new people are being elected. You see in politics that when you have a lot of old-timers, like the Senate, people who have been around for a long time and have been career politicians, they love them.

The downside of career politicians is that they can be corrupt, but an upside is they actually get deals done with each other because they know the other person is gonna be in the same position ten years from now and they have to keep dealing with them. So they might as well learn how to cooperate.

Where every time you get like a new incoming freshman class in the House of Representatives, which turns over every two years in the big wave election, nothing gets done because there’s a lot of fighting. Because I just got here; I don’t know you; I don’t know if you’re gonna be around, why should I work with you?

Rather than just try and do whatever I think is right. So it’s important to pick an industry where you can play long-term games, and with long-term people, so those people have to signal that they’re going to be around for a long time, that they’re ethical and their ethics are visible to their action in a long-term game.

It seems that everybody is making each other rich, and in a short-term game, it seems like everybody is making themselves rich. I think that is a brilliant formulation.

Yeah, in a long-term game, it's a positive-sum, we're all baking together. We're trying to make it as big as possible in a short-term game; we're cutting up the pie now. This is not to excuse the socialists—right, the socialists are those people who are not involved in baking the pie, who show up at the end and say, "I want a slice, or I want the whole pie." They show up with the guns.

But I think a good leader doesn't take credit; a good leader tries to inspire people so that the team gets the job done, and then things get divided up according to fairness and who contributed how much, or as close to it as possible, and took a risk as opposed to just whoever has the longest knife, the sharpest knives at the end.

So these next two tweets are "Play iterated games" and "All returns in life, whether in wealth, relationships, or knowledge, come from compound interest."

Yeah, when you have been doing business with somebody—when you've been friends with somebody for ten years, 20 years, 30 years, it just gets better and better because you trust them. So easy if the friction goes down, you can do bigger and bigger things together.

For example, the simplest one is getting married to someone, having kids, and raising children. Like that’s compound interest, right? Investing in those relationships, those relationships would be invaluable compared to more casual relationships.

It's true in health and fitness. You know, the fitter you are, the easier it is to stay fit, whereas the more you deteriorate your body, the harder it is to come back and claw your way back to a baseline, and requires heroic acts.

Regarding compound interest, I think I saw you retweet something a while back. Maybe it was from Edie Lattimore that went something along the lines of "Get some traction, get purchase, and don't lose it."

So the idea was to gain some initial traction and never fall back, just keep ratcheting up and up. I don't remember exactly, but I think that was right.

Yeah, "Get traction, don't let go." That was a good one.

Yeah, in terms of picking people to work with, they should have high intelligence, high energy, and high integrity. I find that’s the three-part checklist that you cannot compromise on.

You need someone who's smart, or they're heading in the wrong direction, and you're not gonna end up in the right place. You need someone with high energy because the world is full of smart, lazy people. We all know people in our lives who are really smart, but you know can't get out of bed or lift a finger.

And we also know people who have a very high energy but not that smart, so they work hard but they're running in the wrong direction.

And smart is not a pejorative; it's not meant to be like someone's smart and someone else is stupid, but it’s more than everyone is smart at different things, so depending on what you want to do well, you have to find someone who’s smart at that thing.

And then energy—a lot of times, people are unmotivated for a specific thing, but they're not motivated for other things.

For example, someone might be really unmotivated to go to a job and sit in an office, but they might be really motivated to go paint, right? Well, in that case, they should be a painter. They should be putting art up on the internet, trying to figure out how to build a career out of that, rather than wearing a collar around their neck and going to a dreary job.

And then high integrity is the most important because otherwise, you’ve got the other two. What you have is you have a smart and hardworking crook who’s eventually going to cheat you.

So you have to figure out if the person has high integrity, and as we talked about, the way you do that is through signals, and signals is what they do, not what they say. It's all the nonverbal stuff that people do when they think nobody's looking.

With respect to the energy, there was this interesting thing from Sam Altman a while back where he was talking about delegation and even saying one of the important things for delegation is to delegate to people who are actually good at the thing that you want to do.

It's the most obvious thing, but it seems like you want to partner with people who are naturally going to do the things that you want them to do.

Yeah, I almost won't start a company or hire a person or work with somebody if I just don't think they're into what I wanted to do. When I was younger, I used to try and talk people into things. I was in this idea you can sell someone into doing something, but you can't.

You can't keep them motivated. You can get them inspired initially; it might work if you're a king like Henry V, and you're trying to get them to just charge into battle, and then they'll figure it out.

But if you're trying to keep someone motivated for the long term, motivation has to come intrinsically. You can't just create it, nor can you be the crutch for them if they don't have that intrinsic motivation.

So you have to make sure people actually are high-energy and want to do what you want them to do when you want to work with them.

Reading signals is very, very important. Signals are what people do despite what they say, so it's important to pay attention to subtle signals. We all know that socially, if someone treats a waiter or waitress in a restaurant badly, then it's only a matter of time until they treat you badly. If somebody screws over an enemy and is vindictive towards them, well, it's only a matter of time before they redefine you from friend to enemy, and you feel their wrath.

So, angry, outraged, vindictive, short-term-thinking people are essentially that way in many interactions in their life. People are oddly consistent; it's one of the things you learn about them.

So you want to find long-term people. You want to find people who seem irrationally ethical. For example, I had one friend of mine—at a company I invested in—and the company failed, and he could have wiped out all the investors, but he kept putting more and more personal money in through three different pivots.

He put personal money in until the company finally succeeded. And in the process, he never wiped out the investors. And I was always grateful to him for that.

I said, "Wow, that's amazing that you were so good to your investors. You didn't wipe them out." And he got offended by that; he said, "I didn't do it for you. I didn't do it for my investors. I did it for me. It's my own self-esteem; it's what I care about. That's how I live my life." That's the kind of person you want to work with.

Another quote that I like—I would tweet on this. I think I read this somewhere else, which said, "I'm not taking credit for this," but I modified it a little bit, which is that self-esteem is a reputation that you have with yourself. You'll always know.

So good people, moral people, ethical people, easy-to-work-with people tend to have very high self-esteem because they have very good reputation with themselves, and they understand that it's not ego. Self-esteem and ego are different things, because ego can be undeserving. But self-esteem, at least you feel like you lived up to your own internal moral code of ethics.

And so it's very hard to work with people who end up being low integrity. It's hard to figure out who's high integrity and low integrity. Generally, the more someone is saying that they're moral and ethical and high integrity, the less likely they're to be that way.

It's very much like status signaling. If you overtly bid for status—if you openly